Blockbuster to Sell European Stores

(Blockbuster article updated with company and analyst commentary, board resignation and stock movement.)

NEW YORK ( TheStreet) -- Blockbuster ( BBI) is putting its European stores up for sale.

The movie rental company plans to shed its 650 British stores and locations in Denmark, Italy and Ireland, in an effort to raise cash, according to the Sunday Times. The newspaper said Blockbuster hired Winchester Capital to find a buyer.

Blockbuster values the European arm at $76 million, the Sunday Times said.

The company employs more than 5,000 workers in Europe.

Plans to sell European stores shouldn't come as much of a surprise, as the company has been in negotiations to shed the unit since the second quarter last year, Blockbuster spokesperson Michelle Metzger said.

Shares of Blockbuster are gaining 1.2% to 41 cents a share in morning trading.

The news comes as Blockbuster struggles to stay afloat. The company widened its fourth-quarter loss to $434.9 million, or $2.24 a share, as same-store sales tumbled nearly 16%.

There have also been concerns over Blockbuster's debt load, which totals about $1 billion. The company has been in talks with advisors and counselors to restructure its debt.

"If Blockbuster did not have a huge interest expense bill, it would be performing reasonably okay, but that debt load colors everything the company does," Wolf says.

Separately, Blockbuster announced that Jackie Clegg, whose husband is Connecticut Sen. Chris Dodd, resigned from its board of directors.

Clegg had served as a board member since July of 2003.

Joseph Fitzsimmons was also nominated to fill a seat vacated by billionaire Carl Icahn, who resigned in January. Fitzsimmons, who has served as senior vice president of finance and treasurer of Wal-Mart ( WMT), and chief financial officer for Wendy's ( WEN), will stand for election at the company's shareholder meeting on May 26.

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